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Possible GOP replacement for Obamacare includes no individual mandate, shifts Medicaid to states

The Congressional Budget Office has said repealing the mandate would increase insurance premiums by roughly 20 percent.

Susan Morse, Associate Editor

House Majority Leader Paul Ryan (photo by <a href="https://www.flickr.com/photos/gageskidmore/25483445521">Gage Skidmore</a>)House Majority Leader Paul Ryan (photo by Gage Skidmore)

House Republicans on Thursday revealed a plan to replace Obamacare that gives more power to the states for what the GOP calls innovative programs, such as funding high-risk pools or an expansion of Medicaid.

States would be reimbursed at traditional rates and those that chose to enroll newly eligible beneficiaries would have to fund the program.

House Republicans plan to reverse the disproportionate share payment cuts that the Affordable Care Act made in payments to hospitals that served large numbers of uninsured patients. This is meant to help providers that are bearing the burden of uncompensated care for the uninsured, as well as states that did not expand Medicaid and are bearing that cost.

[Also: GOP Doctors Caucus more influential as ACA repeal looms]

Medicaid would receive an overhaul in the plan and would no longer be open-ended. Instead, states would receive a per-capita payment cap based on the number of beneficiaries.

Meanwhile, consumers would receive tax credits to purchase health insurance. The tax credit would be based on a person's age, not their income, unlike in the Affordable Care Act, according to a PowerPoint presentation given to House members.

The GOP plan gets rid of the individual and employer mandate, which is worrisome to insurers that need healthy people to enroll in coverage.

Payment for the plan is still being worked out and the Congressional Budget Office is doing an analysis.

[Also: Safety net hospitals could lose $41 billion if ACA repeal lacks immediate replacement]

The CBO has said repealing the mandate would increase insurance premiums by roughly 20 percent.

House Ways and Means Chairman Rep. Kevin Brady of Texas said one option is to start taxing more generous employer-sponsored health insurance plans, which opens new insurance plans to taxation, according to The Hill.

The GOP bill also aims at greater patient engagement by expanding health savings accounts.

GOP leaders distributed the policy in documents to members, but the printed material was not made public.

House Speaker Rep. Paul Ryan of Wisconsin said legislators would be discussing the plan after the February break.

Democrats, however, are against the plan.

[Also: Half of Americans do not support Obamacare repeal, Quinnipiac poll finds]

"If you like what you have today, you can't keep it. You might not be able to get coverage at all, especially if you're an older worker," said Rep. Richard Neal, House Ways and Means Committee Ranking Member from Massachusetts. "It undermines employer-sponsored coverage for 177 million Americans and raises taxes on workers."

The GOP Medicaid plan would ration care for nursing home patients, children, pregnant women, and people with disabilities, he said.

"This isn't a fix or a repair – it's a wrecking ball that will rip away healthcare from millions of Americans," Health Subcommittee Ranking Member Rep. Sander Levin of Michigan said.

America's Health Insurance Plans supports expanding HSAs for the individual market and is looking for more information on coverage incentives.

"We recognize the individual mandate will change, and that it must be replaced by other incentives to encourage people to stay continually covered, particularly if health plans must continue to cover pre-existing conditions," said AHIP spokeswoman Kristine Grow. "Greater clarity soon on what those continuous coverage incentives will be is essential as plans prepare to file products for 2018."

America's Essential Hospitals President and CEO Bruce Siegel, MD, said they are encouraged about the planned elimination of the disproportionate share hospital cuts, but are concerned about the reduction in federal support for the Medicaid program. Per capita caps could cut federal spending on the Medicaid program and any substantial cuts would be unsustainable for hospitals and patients, he said.

HSAs and high-deductible health plans could create problems of more people forgoing needed care or receiving care they can't afford, which would drive up uncompensated care costs for hospitals already operating with no margin, Siegel said.

Twitter: @SusanJMorse

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